Colleges Increase Hedge Fund, Private Equity Allocations

Jan 22 2007 | 6:06pm ET

Colleges and universities continued to plow ever-larger portions of their endowments into alternatives last year. But, like hedge funds, their efforts left them lagging the broader markets.

According to a survey from the National Association of College and University Business Officers and TIAA-CREF, the average endowment allocated 9.6% to hedge funds and 1.9% to private equity, a 336% and 533% increase over the past decade, but their hedge fund investments in 2006 did only marginally better than their U.S. equity portfolios, returning 10.4% to the stocks’ 10.3%. In 2005, U.S. equity investments actually edged hedge funds, 8.8% to 8.5%.

Endowments did better in other alternative assets, especially natural resources (average allocation: 1.5%) at 28.2%, private equity at 17.9%, and real estate (average allocation: 3.5%), with the public portfolio returning 19% and the private portfolio returning 15.8%.

All told, the average higher education endowment returned 10.7%, substantially trailing the Standard & Poor’s 500 Index.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Top 5 Predicted Outcomes Of CalPERS' Hedge Fund Divestment

Sep 22 2014 | 8:35am ET

CalPERS’ announcement to divest of hedge funds has created a significant buzz...

 

Videos

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.